Gas distribution company Gujarat Gas has taken a steep price hike as far as the industrial segment is concerned. The latest hike is of the magnitude of Rs 10 per scm or 28 percent. Prior to this, the last increase by the company was in August.
In the latest revision, Gujarat Gas -- a unit of state-run Gujarat State Petroleum Corporation -- also increased the CNG price by Rs 2.50 per kg. The hike comes on the back of a surge in the LNG price to multi-year high.
Shares in Gujarat Gas jumped as much as 4.6 percent on BSE.
The hike in the industrial segment exceeds analysts' expectations and is going to be margin-accretive for the company.
Brokerage ICICI Securities said in a note on Monday that the company requires price hikes any further increases would mean that volumes may fall further. The company may have to now choose between volumes and margins in FY23.
Spot LNG futures are at around $16.8 per mmbtu now. The company may have to link their purchases with crude futures going forward.
Analysts will watch out for changes in volumes this time around as they had dipped following the August hike.